Flooring News and Updates – May 2026

Some initial signs of recovery and a major recapitalization dominate the headlines for the first five months of 2026

Positive Signs Pointing to a Rebound

After a rocky 2025, flooring manufacturers are indicating that we may be turning a corner. Mohawk (MHK) reported an 8% uptick in global sales. While noting that underlying demand remains soft, North American sales were up 2% year-over-year in the first quarter of 2026. Commercial flooring manufacturer Interface (TILE) posted an even more impressive 11.3% jump in sales compared to the same time last year with strong momentum in the commercial market. Retailers remain under pressure as consumer discretionary spending continues to be lackluster, with big-box retailer Floor & Décor (FND) down 0.7% from last year and The Tile Shop (TTSH) down 3% for the same period.

Empire Today Completes Recapitalization

Direct-to-Consumer retailer Empire Today, previously owned by private equity firm Charlesbank Capital Partners, completed a recapitalization with investment from Fortress Investment Group and Invesco Senior Secured Management, both previously lenders to the company. Empire had struggled with falling demand, pressure on profitability, and a high debt load that had the company levered over 20x Debt/EBITDA. The restructuring lowers the debt amount significantly with a large equity infusion from Fortress and Invesco. This should free up cash for investment in marketing and customer acquisition, as well as potentially future M&A in the DTC home improvement channel. We expect Fortress and Invesco to take a long-term view, using the increased financial flexibility provided by the transaction to right the ship and take advantage of a rebound in residential renovation.

Artificial Intelligence and Technology Remain Top of Mind

The ever-evolving AI revolution has left no industry untouched, including building materials. Large, highly scaled manufacturers and retailers are deploying models based on propriety data to manage inventory and logistics on the back end, and customer experience, product suggestions and pricing on the customer-facing side. Smaller founder-owned firms now have a litany of options for customer-focused chat assistants and order intake, marketing and customer-acquisition, scheduling and estimating, and room visualization. Not every tool is right for every firm, and businesses that rapidly deploy customer-focused AI have to balance the risk of abandoning the human element from the sales and customer service experience, which could backfire in some cases. Still, nearly every business could benefit from thoughtful engagement with purpose-built tools that can augment, rather than replace, the key capabilities that made them successful in the first place.

Housing Starts Show Signs of Life

April housing starts came in at nearly 1.5MM units, annualized, 2.8% above March and 4.6% above April 2025. The bulk of the increase came from multifamily units, with 23% growth in buildings with 5 or more units. This is a welcome relief from the multifamily slowdown we saw in 2024 that lingered into 2025, after a significant increase in construction in 2023. Mortgage rates and geopolitical uncertainty continue to weigh on the housing market, but this surprising resilience in the face of serious headwinds is encouraging, and suggests that when things settle down, the market is poised for significant growth in 2027 and 2028.

Investment and M&A in the Sector Continues

Despite years of uphill struggle, institutional investment and M&A in the building products sector remains encouraging. Distribution consolidator QXO has raised and deployed billions in capital, acquiring Beacon Roofing, Kodiak Building Partners, and most recently insulation distributor/installer TopBuild. Commercial flooring contractor Diverzify completed a $240MM investment led by Paceline Equity Partners. Japanese firms have been executing a multi-billion-dollar strategy in US housing, purchasing dozens of homebuilders over the past few years. The smart money is betting big on a strong US building products market – participants would be wise to pay attention.

About Anchor Peabody

Anchor Peabody is the premier investment bank for the building industry. Our dedicated M&A specialists deliver outsized outcomes that only insiders can. For a confidential discussion, please reach out to Aaron Toomey at [email protected]